SACM11005 - Claims involving two or more years: background and legislation

TMA70/SCH1B

Before the introduction of Self-Assessment and the Current Year basis of assessment, a claim to carry back losses to an earlier year meant that the assessment for that earlier year had to be re-opened. This is no longer the case.

Such claims are now dealt with in accordance with TMA70/S42 and SCH1B and there is no need to re-open the earlier year where the claim affects more than one year.

The claims involved include the

• carry back of losses under ITA07/S64
• carry back of losses in the early years of trade under ITA07/S72
• carry back of pensions contributions (not available after 5 April 2006)
• averaging of farming profits under ITTOIA05/s221, and
• averaging of literary and artistic profits under ITTOIA05/s221.

Each type of claim may be governed by a specific time limit set out in the relevant legislation. If that is not the case, the general time limit at TMA70/S43 will apply.